In the Market

China suspends research licenses
China has suspended the trial licenses for 11 research institutes that violated rules governing the testing of genetically modified organisms (GMOs), according to the country’s ag ministry. It reports these institutes had performed tests on ag products like corn, cane and rice without reporting it to the ministry.

Cattle futures
Traders were unimpressed by boxed beef movement coming off of the holidays. In addition, showlist estimates are up a net 23,000 head this week, with all major locations recording increases. Therefore, traders may be comfortable with nearbys at a discount to last week’s cash trade between $117 and $118.

Soybean export tax cuts
Argentina plans to cut its export duty on soybeans by 12 percentage points to 18 percent by 2020, the country’s government announced Jan. 3. The decree explains that the tax will remain at 30 percent in 2017 (down 5 percentage points from 2015), but in 2018 and 2019, the tax will be dropped by 0.5 points each month. President Mauricio Macri’s original plan was to cut another five percentage points from the export tax in 2017, followed by the same cut each year thereafter. The half-point monthly cut for 2018 and 2019 also will apply to the 27-percent duty on soy oil and soymeal exports.

Chinese reform to boost farm income
China has launched reforms that will allow growers to convert their assets, including land-use rights and operating assets, into shares in various ventures to boost their income, the country’s ag minister announced Jan. 4. The government plans to conduct “verification and evaluation” of collectively owned rural assets. It will then quantify operating assets and allocate them to members of collective economic organizations in the form of shares or allotments. Such reforms are expected to be finished in around five years.

Early termination option for CRP
Beginning Jan. 9, the U.S. Department of Agriculture will allow farmers and ranchers to terminate certain Conservation Reserve Program (CRP) contracts early, Lanon Baccam, deputy undersecretary for the Farm Service Agency, announced Jan. 3. This early-termination option is intended to make it easier to transfer property from one generation to the next. The land that is eligible for early termination is among the least environmentally sensitive land enrolled in CRP. Normally if a landowner terminates a CRP contract early, he or she would be required to repay all previous payments plus interest. The new policy waives this repayment if the land is transferred to a beginning farmer or rancher through a sale or lease with an option to buy.

Cotton AWP falls
The Adjusted World Price (AWP) for cotton is at 59.65 cents per pound, effective Dec. 30, down from 60.04 cents per pound the prior week and the first time under 60 cents since Nov. 18. The USDA also announced Special Import Quota #15 for 63,686 bales of upland cotton, equal to one week’s domestic mill use. The quota will be established Jan. 5 and applies to cotton purchased no later than April 4 and imported into the U.S. no later than July 3.

Smithfield buying elevators
Smithfield Foods Inc., the world’s largest pork producer, is cutting out the middleman and buying grain elevators so it can source grain directly from farmers. In September, the company purchased two grain elevators in Ohio, meaning it can ship grain directly from Ohio to feed pigs at its Tar Heel, N.C. packing plant, the world’s largest. The company now buys 65 percent of its animal feed directly from farmers versus just 10 percent in 2010. This is another blow for grain handlers who are already struggling with low corn and soybean prices. Smithfield also hopes to work directly with producers to influence management of their farms, resulting in higher-quality grain that speeds hog weight gain.

Company shift on chicken
Restaurant Brands International, the parent company for Burger King and Tim Hortons, plans to switch to chicken raised without antibiotics considered “critically important” to human medicine, with the change in U.S. operations in 2017 and in Canada in 2018. “We believe it is important to reduce the use of antibiotics important for human medicine in order to preserve the effectiveness of antibiotics in both veterinary and human medicine,” Restaurant Brands International said in announcing the shift.

China: new soy-crushing record
Chinese soy plants crushed a record 1.95 metric tons during the last week of 2016, driven by large imports and a high crushing margin, China National Grain and Oils Information Center said in a Jan. 3 report. Weekly soy crushing has remained at more than 1.8 million tons for seven consecutive weeks.

More eggs to South Korea?
U.S. officials are urgently seeking an agreement with South Korea that would allow imports of American eggs so farmers can cash in on a shortage caused by the Asian country's worst-ever outbreak of bird flu. The two sides are negotiating over terms of potential shipments after South Korea lifted a ban on imports of U.S. table eggs it imposed when the United States grappled with its own bout of bird flu last year, according to the U.S. Department of Agriculture.